South Carolina Leaders Propose Income Tax Cut to 3.99%
March 26, 2025
South Carolina lawmakers, joined by Governor Henry McMaster, unveiled a new proposal Tuesday that would reduce the state’s top personal income tax rate to a flat 3.99%. The announcement was made during a State House press conference streamed live by South Carolina ETV.
The legislation would simplify South Carolina’s current two-bracket income tax system by consolidating it into a single flat rate of 3.99%. House Ways and Means Committee Chairman Bruce Bannister said the move reflects both the state’s strong economic performance and a long-term goal of providing meaningful relief to taxpayers.
“With the new bill, we will collapse our current two-tier tax system and replace it with a single flat tax rate of 3.99%,” Bannister said during the press conference.
Governor McMaster cited the state’s population growth and budget surpluses as signs that South Carolina is well-positioned for this reform. He emphasized that economic strength—not short-term gains—is driving the proposal.
“South Carolina can afford the income tax cut for now thanks to its booming economy and population,” McMaster said, noting the state has added more than 1.5 million people since 2000.
The legislation includes a mechanism to reduce the flat tax rate even further—to 2.49%—over time, contingent upon continued economic growth and revenue increases. Under the plan, $200 million in income tax revenue would be cut annually until the lower threshold is reached.
Legislative leaders expressed confidence that the General Assembly could pass the bill before the session ends in May.
If adopted, South Carolina would have one of the lowest income tax rates in the Southeast—potentially boosting the state’s competitiveness for attracting new residents and businesses.
Critics of the plan have raised concerns about its potential impact on families. Rep. Joe White of Newberry noted in a recent post that, under the current proposal, a family of four (two adults and two children) could actually face a tax increase. Stay tuned to the Buzz for updates as the plan continues to make its way through both chambers of the State House.
The full press conference is available on SCETV’s website and YouTube channel.
Source: March 25, 2025 SCETV livestream of South Carolina income tax reform press conference.
Cover photo: SC Rep. Bruce Bannister (from livestream)
